TMI Blog2015 (12) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and has been accepted and followed by the Revenue. However, this finding will not apply to the claim of depreciation as well as the investment allowance. The claim of depreciation as well as investment allowance is asset specific and are allowable only when the assets are installed and put to use. In the case before us, the AO has clearly brought out on record that the machinery was not installed by the end of the relevant previous year i.e., 31-12-1983 in the case of assessee which fact has been considered and accepted by the Hon'ble High Court of AP. When the machinery has not been installed and used by the assessee for the purpose of manufacturing of cement, then the claim of depreciation and investment allowance is rightly not allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are that, the assessee company which engaged in the business of manufacture of fertilizers also embarked on the activity of manufacture of cement. Upto AY. 1983-84, assessee was adopting the previous year as year ending on 31st of December. On 05-03-1984, the assessee filed a letter before the Income Tax Officer, requesting for according change in the end of the previous year to March, 31st 1984 instead of December, 31st 1983. The said application of the assessee was rejected. This issue went up to the Hon'ble High Court and the High Court dismissed the assessee's appeal. Thereafter, the assessee filed a return of income on 31-08-1984 admitting a loss of ₹ 3,68,95,374/- taking the previous year as year ending o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant ward had visited the cement factory on 21-04-1984 and found that the production of cement commenced only during March, 1984 and the final production was started on 02-04-1984. 3. It was further observed that by 31-12-1983, assessee did not install the Plant Machinery totally and most of the Plant Machinery of cement unit was installed from January, 1984 to March, 1984. Therefore, he came to the conclusion that the assessee did not set up the cement unit by 31-12-1983 and most of the machinery was not erected and the Plant Machinery was not ready to manufacture. Hence, he held that as the assessee did not set up the industry, the business cannot be said to have commenced. As regards the other contention of the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, the issue as to whether assessee has set up and commenced the cement manufacturing business has reached finality. While giving effect to the order of ITAT dt. 31-01-2013 for the AY. 1984-85, the AO passed a modification order u/s. 154 whereby the depreciation and investment allowance on the machinery used for cement manufacturing business was added back. Aggrieved, assessee preferred an appeal before the CIT(A), who dismissed the same and the assessee is in appeal before us. 4. The Ld. Counsel for the assessee, Shri P.J. Pardiwallla, Sr. Advocate and Shri A.V. Raghu Ram, while reiterating the submissions made by the assessee before the authorities below submitted that the finding of the Tribunal in the appeal proceedings, that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation as well as the investment allowance. The claim of depreciation as well as investment allowance is asset specific and are allowable only when the assets are installed and put to use. In the case before us, the AO has clearly brought out on record that the machinery was not installed by the end of the relevant previous year i.e., 31-12-1983 in the case of assessee which fact has been considered and accepted by the Hon'ble High Court of AP. When the machinery has not been installed and used by the assessee for the purpose of manufacturing of cement, then the claim of depreciation and investment allowance is rightly not allowed by the AO. In view of the same, we do not see any reason to interfere with the order of the CIT(A) an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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